Hi, On Mon, Aug 10, 2015 at 12:20:36AM +0200, info--- via bitcoin-dev wrote: > Off-chain transactions, whether it's Lightning or something else, > potentially extract fees, which may otherwise be paid to miners, if the > transactions were actually on-chain. > > In this context, wouldn't it be contradictory, maybe even harmful, to > aim for an environment, where some/many/most transactions are off-chain?
I think the fee market's long-term implications for mining rewards is very important as well! However, opening and closing channels will not be infrequent to the point that it will never happen with Lightning. Individuals that fill up their channel will need to accommodate accumulation (as well as those that do a lot of disbursement). These fund flows are not too rare, and huge payments (think the equivalent to wire transfers today) will probably be still on-chain. I think the payment size of micropayments to credit cards are Lightning-scale, what people use today for wire transfers (e.g. buying a house) will be on-chain. What Lightning does is it mitigates the advantages that doing an end-run around bitcoin entirely via centralized systems provides to a sufficient level, e.g. everyone transacting on Coinbase. Having everything on centralized services will have significantly lower on-chain transactions than Lightning and is one of the more viable alternative off-chain payments. Fundamentally, without off-chain transactions, there's a paradox within a viable fee market. If you presume that fees should be relatively competitive (i.e. not asymptotically close to zero), that implies that higher-value transactions *will* be prioritized over low-value transactions, as high-value transactions are willing to pay higher fees. Wire transfers are cheap when it's a million-dollar wire. In my view, different transaction values is the much larger risk for on-chain transaction fee markets, with high-value transactions crowding out low-value transactions on-chain. With lightning, it significantly mitigates this problem by aggregating the low-value transactions off-chain. -- Joseph Poon _______________________________________________ bitcoin-dev mailing list bitcoin-dev@lists.linuxfoundation.org https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
